Indian stocks edged lower in choppy trade as crude oil prices rose and the rupee fell against the dollar on a flare up of militant violence in Iraq, a key oil exporter. The barometer index, the S&P BSE Sensex, was provisionally down 320.75 points or 1.26%, off 408.84 points from the day's high and up 86.14 points from the day's low. The market breadth indicating the overall health of the market was negative.
Index heavyweight Reliance Industries (RIL) extended losses in late trade after Chairman Mukesh Ambani said at the company's annual shareholders' meeting today, 18 June 2014, that RIL is investing over Rs 1.8 lakh crore in its businesses in the current three years' investment cycle. Bank stocks fell across the board. But, private sector Kotak Mahindra Bank scaled record high on plan to raise FII investment cap to 40% from 37%.
As per provisional closing, the S&P BSE Sensex was down 320.75 points or 1.26% to 25,200.44. The index slumped 406.89 points at the day's low of 25,114.30 in afternoon trade. The index gained 88.09 points at the day's high of 25,609.28 in mid-morning trade, its highest level since 13 June 2014.
The CNX Nifty was down 89.30 points or 1.17% to 7,542.40. The index hit a low of 7,515.50 in intraday trade. The index hit a high of 7,663 in intraday trade, its highest level since 13 June 2014.
The market breadth indicating the overall health of the market was negative. On BSE, 1,638 shares fell and 1,393 shares rose. A total of 96 shares were unchanged.
The BSE Mid-Cap index was off 90.03 points or 0.99% at 9,011.44. The BSE Small-Cap index was off 43.89 points or 0.44% at 9,857.67. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 4276 crore, higher than Rs 3790.44 crore on Tuesday, 17 June 2014.
Among the 30-share Sensex pack, 24 stocks declined and rest of them rose.
Bharat Heavy Electricals (Bhel) (down 3.21%), TCS (down 2.55%) and Tata Steel (down 2.27%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries (RIL) fell in volatile trade. The stock shed 2.53% at Rs 1,062.35. The stock hit high of Rs 1,101.95 and low of Rs 1,061.55. Chairman Mukesh Ambani said at the company's annual shareholders' meeting today, 18 June 2014, that RIL is investing over Rs 1.8 lakh crore in its businesses in the current three years' investment cycle.
Ambani said that RIL is making efforts to maximize production from its existing oil and gas fields. With regard to the international oil and gas business, Ambani said that RIL is looking to expand its presence beyond the United States.
Ambani said there will be a phased launch of fourth generation broadband services by Reliance Jio Infocomm in 2015.
Ambani said that RIL is at inflection point in its journey to create value for its stakeholders, based on three-year investment cycle, greater competitive advantage and higher diversity and sustainability of growth and profitability of all its businesses.
Bank stocks fell across the board. Among private sector banks, ICICI Bank (down 2.22%), Yes Bank (down 2.15%), IndusInd Bank (down 2.45%) and HDFC Bank (down 1.4%) declined.
Kotak Mahindra Bank gained 1.98% to Rs 958.05 after scaling record high of Rs 971.80 in intraday trade. Kotak Mahindra Bank proposed to raise the ceiling for Foreign Institutional Investors (FIIs), Foreign Portfolio Investor (FPI) and Qualified Foreign Investor (QFI) investments in the bank to 40% from 37% to help it comply with RBI directive to bring down its current promoter stake by one-fourth in little over next two and half years. The private sector bank in its notice to shareholders for the upcoming annual general meet on 16 July 2014 has sought members' approval to pass a resolution to this effect.
Axis Bank rose 0.27% to Rs 1,844.45 in volatile trade. The stock hit high of Rs 1,873.90 and low of Rs 1,825.
Among PSU bank stocks, Canara Bank (down 2.88%), Punjab National Bank (down 0.96%), State Bank of India (SBI) (down 0.17%), Union Bank of India (down 3.25%) and Bank of Baroda (down 2.59%) edged lower.
Bank of India lost 3.65%. Bank of India's board of directors at a meeting held on 29 May 2014 approved the raising of Tier-1 and Tier-2 capital by issue of fresh equity shares and Tier-1 and Tier-2 bonds at an appropriate time subject to all necessary approvals. The state-run bank made this announcement after trading hours on Tuesday, 17 June 2014.
HCL Technologies fell 1.59%. HCL Technologies today, 18 June 2014, announced that its customer, Purdue Pharma L.P, has extended its end-to-end IT Infrastructure Management engagement with HCL, marking an important milestone for the strategic partnership signed in year 2010. Under the terms of new agreement, HCL will expand collaboration with Purdue on an ongoing companywide IT and infrastructure management undertaking.
Indian stocks witnessed high intraday volatility today, 18 June 2014. Volatility struck bourses in early trade as the key benchmark indices alternately moved between positive and negative zone. Key benchmark indices moved in a narrow range in positive zone in morning trade. Key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, briefly turned negative only to regain positive zone later. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. Indian stocks edged lower after a sudden slide in early afternoon trade as international crude oil prices rose following reports that Sunni militants have attacked Iraq's largest oil refinery. Volatility continued as the key benchmark indices trimmed losses in mid-afternoon trade as European stocks rose. Volatility ruled the roost in late trade as fresh selling derailed an intraday recovery triggered in mid-afternoon.
Brent crude futures which had moved into positive zone from negative zone during trading hours in India following reports of escalation of militant violence in Iraq, once again dropped later. Brent crude futures for August delivery were down 5 cents at $113.40 a barrel. The contract had risen 51 cents to settle at $113.45 yesterday, 17 June 2014, the highest close since 9 September 2013, on continuing militant violence in Iraq.
Increase in oil prices has triggered macroeconomic worries for India which imports majority of its crude oil requirements. Increase in crude oil prices have raised concerns of increase in fuel price inflation and increase in India's current account deficit and fiscal deficit.
In the foreign exchange market, the rupee edged lower against the dollar as equities dropped. The partially convertible rupee was hovering at 60.3650, compared with its close of 60.03/04 on Tuesday, 17 June 2014.
European shares edged higher on Wednesday, 18 June 2014, as investors look ahead to the Federal Reserve's policy decision. Key benchmark indices in UK, France and Germany were up 0.11% to 0.35%.
Asian stocks were mostly lower on Wednesday, 18 June 2014, as investors await the Federal Reserve monetary policy decision scheduled to be released later in the global day today, 18 June 2014. Key benchmark indices in China, Hong Kong, Indonesia and South Korea were off 0.09% to 0.6%. Key benchmark indices in Singapore, Taiwan and Japan were up 0.07% to 0.93%.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 18 June 2014. US stocks ended Tuesday, 17 June 2014 slightly higher, with the main benchmarks gaining for the third consecutive day. However, gains were muted as headlines of violence in Iraq did not abate.
A two-day meeting of the Federal Open Market Committee on US monetary policy concludes today, 18 June 2014. The FOMC after a monetary policy review on 30 April 2014 reduced its monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve. The Fed also said at that time that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends.
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